Debenhams is to wind down the business and close all 124 stores after JD Sports ended discussions over a rescue deal for the struggling department store chain. Rescue talks ended between the two companies following the collapse of Arcadia Group yesterday afternoon. The latest developments now puts 12,000 high street retail jobs at risk.
The sports chain was the only remaining bidder for the company, but with the news of the collapse of Arcadia Group yesterday – the biggest concession stand operator across Debenhams stores – so too has come the decision of JD Sports to terminate its talks of a takeover.
In a brief statement to the London Stock Exchange, the company said: “JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”
Debenhams slid into insolvency in April this year and has been on the search for a buyer since the summer. Without a buyer, the business faces going into liquidation or being wound down. This spring saw Debenhams axe 6,500 jobs. This morning’s news now puts a further 12,000 at risk.
Geoff Rowley of FRP Advisory, the joint administrator to Debenhams, said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.
“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”
Debenhams’s former chairman Sir Ian Cheshire said that the business had been caught out with too many high street outlets on long rental leases.
“You’ve got to be so much faster and so much more online,” he said.
It comes as some 13,000 staff of Sir Philip Green’s Arcadia Group face an anxious wait following the business collapsing into administration. The high street giant, which includes the Topshop, Dorothy Perkins and Burton brands, has hired Deloitte to handle the next steps after the pandemic “severely impacted” sales across its brands.
Ian Grabiner, chief executive of Arcadia, said: “This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders … in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”